Automaker General Motors Corp. (GM) Friday, confirming its previous forecast, reported a huge second quarter loss, hurt mainly by costs associated with the American Axle and local U.S. strikes, and charges related to the U.S. hourly attrition program, as well as actions to reduce North American truck capacity. Revenues dropped over 18% from last year. The company's stock is trading lower by over 6%.
GM's peer Ford Motor Co. (F) on July 24 reported a second quarter net loss, compared to a profit last year, hurt primarily by charges associated with asset impairments. Second quarter revenues, excluding items, declined 13% from last year.
Detroit, Michigan-based GM reported a net loss, on a reported basis, of $15.471 billion or $27.33 per share for the quarter, compared to net income of $0.891 billion or $1.56 per share reported in the prior year period.
The latest results include significant charges and special items. For the quarter, GM recorded expenses of $3.3 billion relating to the 2008 GM North America or GMNA hourly special attrition program, $2.8 billion adjustment to the Delphi reserve and $1.1 billion GMNA restructuring and capacity related costs. The quarterly results also included $1.3 billion impairment of GM's equity interest in GMAC, $340 million Canadian Auto Workers contract-related accounting charges and $197 million related to settlement of the strike at American Axle.
On an adjusted basis, GM's second quarter net loss was $6.346 billion or $11.21 per share per share, compared to net income of $1.411 billion or $2.48 per share posted for the second quarter in 2007.
On average, 12 analysts polled by First Call/Thomson Financial expected a loss of $2.62 per share for the quarter.
The company reported revenues of $38.156 billion that declined from $46.677 billion reported for the same period last year. The Street was looking for second quarter revenues of $44.57 billion.
Automotive sales for the quarter dropped to $37.673 billion from $45.783 billion, while Financial services and insurance revenue plunged to $483 million from $894 million.
At GMNA, revenue for the second quarter dropped 33% to $19.8 billion from $29.7 billion reported in the year-ago period. The decline was largely due to weaker U.S. auto market and lost production due to the work stoppage at American Axle, and at several GM facilities in May and June.
At GM Europe, revenue rose 12% to $10.6 billion. Revenues improved 19% at GM Latin America, Africa and Middle East, helped by improved mix, net pricing and material cost performance along with strong sales performance in key markets. GM Asia Pacific reported 2% drop in revenues for the second quarter, while on a standalone basis, partly owned GMAC finance unit reported a net loss of $2.5 billion for the period.
Total costs and expenses grew 9% to $50.632 billion from last year. GM sold 2.29 million vehicles worldwide in the second quarter, down 5% from last year.
Year-to-date, the company reported a net loss of $18.722 billion or $33.07 per share, compared to net income of $953 million or $1.67 per share in the previous year. Net sales declined to $80.645 billion from $89.904 billion.
Cash and cash equivalents at June 30, 2008 were $19.356 billion, while they were $22.040 billion at June 30, 2007. Inventories for both periods were $17.744 billion and $15.073 billion, respectively.
With the rise in fuel costs, automakers have been finding it hard to remain profitable. Consumers, forced to tighten their belts due to the higher food costs as well, now prefer small fuel efficient cars to gas guzzlers such as SUVs.
In order to tackle the tough U.S. environment, the company unveiled several initiatives in the past few months, including cessation of production at four truck plants, shift reductions at two truck plants, addition of shifts at two car plants, and announced the new Chevrolet global small car program as well as the strategic review of the Hummer brand and production funding approval for the Chevrolet Volt extended range electric vehicle.
Meanwhile, separately, GM announced that its July sales dropped 26.7% to 235,184 units from 320,935 units sold in the same month of last year.
Total truck sales for the month declined 35.4% to 129,849 units, from 201,069 units in the previous year period, while total car sales were 105,335 units, down 12.1% from 119,866 units in the same period of last year.
GM is currently trading at $10.31, down $0.76 or 6.87%, on 28.70 million shares. For the past year, the stock trended in the range of $8.81-$43.20.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.